Global Power-to-Gas Market - 2022-2029

Global Power-to-Gas Market - 2022-2029

Market Overview

The global power-to-gas market reached US$ XX million in 2021 and is expected to reach US$ XX million by 2029, growing at a CAGR of XX% during the forecast period 2022-2029.

The conversion of electrical energy into chemical energy (gas) by water electrolysis is known as Power-to-Gas. The hydrogen gas produced can be used chemically or energetically (as a fuel) (in the industry). The figure below depicts how this approach works and how the various energy sectors are linked. The Power to gas conversion idea is paired with renewable energy sources because of the unavoidable conversion losses in the production chain.

Water electrolysis converts electrical energy (electricity) into chemical energy (gas). The hydrogen gas produced can be used both chemically and energetically (as a fuel) (in the industry). The following figure depicts how this approach works and how the various energy sectors are linked. The Power-to-Gas idea is paired with renewable energy sources due to the inherent conversion losses in the production chain.

Market Dynamics

The growing R&D activities, manufacturing and need for renewable energy generation in the respective processes are major market drivers for the global power-to-gas market. Nevertheless, the high pricing of power-to-gas devices restrains the market’s growth.

The growing R&D activities, manufacturing and need for renewable energy generation

Industrialization is gaining steam over the world, pushing rising industrial power consumption. Manufacturing and process industries are quickly expanding in both developed and emerging countries. The rise of the manufacturing and process sectors raises energy consumption, prompting the need for these companies to discover alternative energy sources. Furthermore, as global consumption rises, so does the desire for newer energy sources that are both environmentally friendly and have low economic implications.

Since the necessity of spending money on research and development (R&D) has never been clearer in modernity, multinational corporations are investing massive sums of money in developing various innovative products. According to the United Nations' Unistat, global R&D spending reached US$2.2 trillion (purchasing power parity) in 2018, up from $1.4 trillion in 2010. As a result, R&D investment increased as a proportion of global GDP from 1.61 percent in 2010 to 1.73 percent in 2018. The number of researchers per million inhabitants in the world increased from 1,022 in 2010 to 1,235 in 2018.

The relevant factor emphasizes the development of efficient energy sources. Governments throughout the world are working hard to reduce energy costs. Many governments support efficient energy-producing technologies to manage rising energy consumption and expenses. As the need for energy-generating gadgets grows, so does the need for product development and research. Since power-to-gas is a new technology, it has the potential to play a key role in generating and managing energy, reducing operating costs, and playing an essential part in environmental protection without jeopardizing product growth. As a result, the expanding industrial process globally and the growing need for energy conservation are important market drivers for the worldwide power-to-gas industry.

High pricing and lower efficiency of power-to-gas technology

Using renewable electricity to generate hydrogen and CO2-neutral methane could help overcome some difficult problems since gas produced from wind and solar energy might provide carbon-neutral fuel for heating and transportation and open the path for large-scale seasonal energy storage. Further, the energy produced by Power-to-Gas has a significant monetary value. Synthetic gas stores energy for long periods and transfers well. It can be utilized to generate the high temperatures required in industrial operations, allowing for the continuing use of existing infrastructure and obviating the need for costly modernization of power plants and appliances, resulting in significant cost savings.

However, power-to-gas is currently only employed in about 30 research and pilot facilities. Many experts feel that the government must now scale up the technology for it to be available and inexpensive in time to fulfill climate commitments. However, much energy is wasted during electrolysis, methanation, and storage, requiring much renewable energy. Only approximately 67 – 81% of the energy remains after electrolysis, and only about 54 - 65% remains after the extra methanation stage. Similarly, synthetic fuel generation through Power-to-Gas is time-consuming and will always be more expensive and inefficient than direct electricity use.

Power-to-Gas systems entail employing several expensive components such as sensors and sophisticated software. As the demand for power-to-gas units grows, the expensive cost of such devices is limiting industry expansion. The requirement for large investments could affect the movement of power-to-gas devices in emerging and advanced economies and could stifle the growth of the respective market.

COVID-19 Impact Analysis

The COVID-19 outbreak has severely affected several service and manufacturing industries due to the enactment of lockdowns and reducing operational capacities to curb the spread of the virus, thereby causing the economy to witness a pitfall. Due to the pandemic, a decline has been witnessed in investments and disruptions in commerce and supply networks globally. Further, the following factors developed due to the COVID-19 pandemic also caused a major downward rift in the global power-to-gas market.

The pandemic's first and most significant influence on the market is on the supply chain, which tarnishes the availability of raw materials and the sale of finished goods due to a large demand-supply mismatch caused by the unavailability of raw materials and disruption of production operations.

Second, because of the COVID-19 pandemic, the manufacturing processes required by the power-to-gas market were significantly inhibited due to lockdowns and institutional constraints.

Disruptions can further explain the pandemic's strong impact on the global power-to-gas industry and the downfall witnessed in important end-user verticals.

Nevertheless, the witnessed growth in end-user verticles after the first three pandemic waves and the growing demand for energy in the respective end-user verticles are expected to aid the market's development in the foreseeable future. The growing technological advancement also offers some major support to the respective market.

Segment Analysis

The global power-to-gas market is classified based on technology, capacity, end-user and region.

Higher efficiency and more sustainability in the process foster the adoption of electrolysis over methanation

The power-to-gas market is divided into two technologies: electrolysis and methanation. The electrolysis segment is expected to have a bigger market share and adoption rate because of its dynamic operations pattern and ability to effectively incorporate electricity generated by fluctuating renewable energy sources such as wind and solar.

Electrolysis focuses on generating synthetic hydrogen (H2) from water and renewable energy. The generated hydrogen is either added to the gas mix, or it can be passed through a second stage that reacts the H2 with carbon dioxide to make methane (CH4)

Methane is a significant component of natural gas and can be directly utilized in any of today's basic gas applications. The CO2 used in the methanation process is taken from the air, biomass, or biogas to maintain a closed carbon cycle.

Geographical Analysis

Europe will dominate the Power-to-Gas market’s regional segment due to several countries in the region adopting extensive initiatives and technologies to curb carbon emissions and control environmental pollution

Europe leads the regional power-to-gas industry since the technology is expected to play an important role in stabilizing the region's energy supply and compensating for variable power generation from renewable energy sources. Germany has seen an increase in demand for power-to-gas technology due to the country's growing need for hydrogen from chemical, industrial, and fuel cell transportation use. Further, Germany’s several initiatives to switch to renewable energy and curb climate catastrophe also promote the power-to-gas market in the region.

For instance, as per the BDI, Germany's largest industry association, for Germany to meet its upper target of a 95% reduction in greenhouse gas emissions by 2050, its entire natural gas supply would need to be replaced with biogas and synthetic gases to avoid emissions from essential industrial combustion processes. Similarly, a meta-analysis on the future role of power-to-gas determined that the more ambitious Germany is on CO2 reduction, the higher the need for a Power-to-Gas market.

Competitive Landscape

The power-to-gas market is extremely niche in terms of the number and scope of global and local producers. The market has a very small number of market players, and the pivotal players among them include Hydrogenics, ITM Power, McPhy Energy, Siemens, MAN Energy Solutions, Nel Hydrogen, Thyssenkrupp, Electrochaea, Exytron, and GreenHydrogen. Mergers, acquisitions, product launches, investments, and collaborations are common market strategies used by big market players to gain a competitive advantage and improve their reputation.

On May 08, 2019, Siemens announced the split-off of its energy company and merged it with Siemens Gamesa Renewable Energy (SGRE), a separately listed wind turbine producer, to form a new multi-technology global energy behemoth. The new corporation is planned to employ 80,000 people and generate US$ 33.6 billion in yearly revenue.

Siemens AG

Overview: Siemens AG offers power and energy solutions to companies in the energy and electricity industry. The company develops and builds fossil fuel power plants and power-generating components, as well as offers gas turbines, steam turbines, generators, gas turbine packages, steam turbine packages, compressors, fans, instrumentation and controls, electrical systems, wind turbines, fuel cells, fuel gasifiers, turbochargers, and environmental systems.

The company serves power, oil and gas, air separation, building complexes, ceramics, chemicals, food and beverage, manufacturing, marine, metals, pulp and paper, textiles, and sugar industries.

The company is based in Erlangen, Germany, with locations in Canada, Mexico, the United States, Brazil, Saudi Arabia, China and other countries

Product Portfolio:

SILYZER 300: SILYZER 300 is one of the largest electrolysis systems on the market, with a power demand of 17.5 megawatts and a production capacity of 335 kg of hydrogen per hour. The product offers maximum system efficiency and cost-effectiveness through proper scaling.

Key Development:

On May 29, 2020, a consortium made up of Engie Solutions, German Aerospace Center (DLR), Siemens Gas and Power, Centrax, Arttic, and four European universities are implementing HYFLEXPOWER, the world’s first integrated power-to-X-to-power hydrogen gas turbine demonstrator, funded by the European Commission under the Horizon 2020 Framework Program for Research and Innovation at Smurfit Kappa PRF’s site, a company specializing in manufacturing recycled paper in Saillat-sur-Vienne, France.

Why Purchase the Report?

To visualize the global power-to-gas market segmentation based on technology, capacity, end-user and region, as well as understand key commercial assets and players.

Identify commercial opportunities in the global power-to-gas market by analyzing trends and co-development.

Excel data sheet with numerous data points of power-to-gas market-level with four segments.

PDF report consisting of cogently put together market analysis after exhaustive qualitative interviews and in-depth market study.

Product mapping available as excel consisting of key products of all the major market players

The global power-to-gas market report would provide approximately 62 tables, 55 figures and almost 181 pages.

Target Audience 2023

Manufacturers/ Buyers

Industry Investors/Investment Bankers

Research Professionals

Emerging Companies